The following points highlight the seven important criterion for revenue recognition. Some of the criterion are: 1. Revenue Recognised at the Point of Sale 2. Revenue Recognition in Sale of Services 3. Revenue Recognition in Construction Work 4. Revenue Recognition in Instalment Credit Sales 5. Revenue Recognition Using Production Method and Others. Criteria # 1. Revenue Recognised at the Point [...]
The following points highlight the four main adjustments to be made to determine revenue. The adjustments are: 1. Discounts 2. Sales Returns and Allowances 3. Bad Debts 4. Revenue Measurement in Non-Cash Transactions. Adjustment # 1. Discounts: Discounts may be generally of two types—trade discount and cash discount. Trade discounts are used in determining the invoice prices, i.e., actual selling [...]
In this article we will discuss about the effects of uncertainties on revenue recognition. Revenue recognition inevitably falls short of its objective because of uncertainty and its effects on business and economic activities and their depiction and measurement. Uncertainty often clouds whether a particular event has occurred or what an event's effects on assets or liabilities or both may have [...]